LaSalle Hotel Properties, a multi-operator real estate investment trust, reaffirmed its support for a merger with Blackstone Real Estate Partners VIII, rejecting an unsolicited offer from Pebblebrook Hotel Trust on Monday.
Maryland-based REIT Pebblebrook proposed a merger offer valued at $36.21 per share. LaSalle rejected the offer, saying it “does not constitute, and could not reasonably be expected to lead to, a ‘Superior Proposal’ as defined in LaSalle’s merger agreement with affiliates of Blackstone.”
On May 21, LaSalle entered into the Blackstone Merger Agreement, under which Blackstone will acquire all outstanding common shares of beneficial interest of LaSalle for $33.50 per share in an all-cash transaction valued at $4.8 billion.
Pebblebrook is one of LaSalle’s largest shareholders, owning 10.8 million common shares with a 9.8% stake in the company. President and ceo Jon Bortz says Pebblebrook will not back down from its interested in LaSalle.
“We have spoken with the owners of the vast majority of LaSalle common shares, who have all expressed their support for our offer over the Blackstone proposal, and we see no scenario in which shareholders approve Blackstone’s take-under deal,” he says. “As such, we are reconfirming that our outstanding offer will continue to be available for the LaSalle Board’s consideration for a reasonable period of time following a rejection of the Blackstone proposal by shareholders, which we believe is inevitable. We remain prepared to move quickly to execute a merger agreement.”
LaSalle shareholders on record as of July 20 will vote on the proposed deals in September. As of press time Monday, LaSalle’s share price was up 0.3% to $34.51.
LaSalle owns 41 upscale, full-service hotels with 10,400 guestrooms in 11 markets across seven states and Washington D.C. Pebblebrook owns 28 upper-upscale, full-service hotels with 6,973 guestrooms across nine states and D.C.